My parents, in their 60s, are of the baby boom generation but due to some questionable financial decisions over the years as well as some misfortune (eg redundancies) have not ended up in the same sort of secure financial position as many of their generation. Neither of them have a pension other than the state pension. They do have about £300k equity left over from the sale of our family home a few years back. Since then they’ve been in rented at home and abroad and have also bought, renovated and sold a few houses ( my dad’s really good at DIY) some at greater profit than others.
A year ago they moved into a 4 bed house in my hometown. My parents used £200k of their cash as the deposit and my brother took a mortgage out on the remaining £150k. The idea was to renovate & sell on in 3 years, pay back my brother & divide the profit according to some formula they devised. Now, one year in, my dad’s done the renovation & the estate agent says he’s added £100k value.
To add a layer of complication, when they first moved into the property my mum was very upset because she hates the transient life they’re leading, moving from house to house and said she couldn’t bear to leave another place she would get attached to. I sympathised with this ( she is an anxious, emotional person who suffers from depression so I’m quite invested in how she’s feeling). So at that point I offered that my husband & i could take over the mortgage from my brother after 3 years instead & they could stay put. We looked at it carefully & could afford it at the monthly rate my brother is paying with some sacrifices. I am no financial mastermind & didnt properly think about the implications of 2nd mortgage or logistics of this arrangement.
Anyway, now my dad has realised he’s added good value, he wants to sell up now & use the money to do 2 or 3 more renovations while he still has the energy, health etc then retire. He’s happy to then live in a downsized place but would like to have money for travel. He hates the idea of taking money from me and can’t see how it would work. Like would i buy the house from my bro at the new price? Buy to let mortgage? If they stay in the house he rightly points out They’d still have to keep their 200k equity in leaving them only £100k plus state pension to survive on for what could be another 20 years. Meanwhile my mum is really upset & wants to stay in the house at all costs, take me up on my offer etc. It is the size of a family home really but all her friends live in these types of houses so I think she feels quite entitled to the same as well as a lifestyle involving travel, lots of new clothes etc etc.
In some ways I know my mum is unreasonable- she wants something she hasn’t worked for. She either totally relied on my dad being succesful, but then he wasn’t or didn’t think about the future at all. But in other ways I feel very sorry for her & don’t want her to have to keep moving as she approaches 70.
Can anyone think of a solution to this dilemma?